Industrial automation expected to grow according to report

In its analysis of the 2017 global industrial automation equipment market, IHS Markit analysts conclude there are seven reasons for optimism as the new year dawns.

"After a disappointing 2016 in automation sales, declining revenues for many equipment suppliers and investment uncertainties in numerous end markets, vendors in industrial automation are hoping for a brighter 2017," said Mark Watson, senior research manager of manufacturing technology for IHS Markit, and a member of the Plant Engineering Editorial Advisory Board.

The top seven trends in 2017, and comments from technology analysts, include:

1. Global market to grow in spite of headwinds

"The industrial automation equipment (IAE) market is expected to grow in 2017, reversing two consecutive years of contraction. While growth prospects vary by sector, 2017 growth—projected at 1.5%—will take place despite headwinds, mainly in the form of low oil prices as well as a reduction in the sales of heavy machinery."

2. Remote cloud-based analytics to shift to local and edge computing

"Throughout 2016, many cloud platforms were announced or released to support the Internet of Things (IoT) in manufacturing. While the remote cloud can offer significant advantages in terms of scalability and cost, concerns around cybersecurity caused hesitancy among end users. As a result, in-house cloud solutions and "edge" analytics will gain scalability in 2017. However, the continued education of the market will also result in companies gaining increased confidence in the advantages and benefits that the remote cloud can provide."

3. Industrial automation to become more influential in outsourced or relocated manufacturing

"Since 2014, changes in currency exchange rates, falling shipping costs, and the questionable longevity of proposed and existing trade agreements, have acted in concert to weaken once-solid justifications for offshoring factories, at least for the time being. Expect more vendors in 2017 to choose to invest in automation at US facilities in an effort to leverage tax incentives and a skilled workforce, rather than in offshoring production."

4. Software-centric solutions to stay competitive

"While partnerships are one route that companies can undertake in bringing information technology (IT) and operations technology (OT) expertise, a handful of automation vendors last year engaged in the active acquisition of software vendors to meet this need. Expect to see an acceleration in acquisitions and partnerships in 2017, as automation companies fight over and target software vendors able to expand their smart manufacturing portfolios."

5. Capital equipment markets to consolidate

"2017 will be a year of increased market consolidation across several capital equipment markets, such as those for motors, generators, turbines and generator sets. For market leaders, maintaining—or even expanding—market share will remain a high priority, as market growth in 2017 is expected to remain subdued."

6. Connectivity standards to prevail

"With ongoing pressure from end users, and opportunities for increased connectivity through industrial-IoT-based solutions, new possibilities for standardized communication have come about. The prevalence of open platform communications unified architecture (OPC UA)—together with the release of time-sensitive network (TSN) standards at the end of the year—will bring further connectivity standardization in 2017."

7. Artificial intelligence (AI) to ramp up on the factory floor

"This year, robots featuring improved connectivity and sensing capabilities will continue to lead in the advancement of smart manufacturing. With the further development of AI, industrial robots will become more intelligent. They will be able to perceive, learn and make decisions on their own in the factory."